Appeals Court upholds Nevada ban on Kalshi sports contracts
Nevada can now ban prediction market operator Kalshi from offering sports contracts after the United States Court of Appeals for the Ninth Circuit ruled in favour of the state’s Gaming Control Board (NGCB) on Tuesday. The ruling builds on a November 2025 federal court order that first barred Kalshi from operating in Nevada.
Super Bowl impact raises concerns
Despite the ongoing appeal, Kalshi continued serving Nevada customers—including during last week’s Super Bowl. But it recorded the lowest wagering levels in a decade in the state and analysts suggest that prediction markets may have diverted activity away from traditional sportsbooks. Yet nationwide, Kalshi exceeded $1 billion in trading volume, including over $100 million on the halftime performer’s first song. It reached a daily record high, according to Tarek Mansour, CEO of Kalshi, as quoted by a report from CNBC.
Additionally, in other states like New Jersey, preliminary data indicated $126.5 million in wagers with a 31.1 percent hold and $38.7 million in operator revenue, as reported by several local media outlets.
The Fed's latest research paper: Kalshi
— Kalshi (@Kalshi) February 18, 2026
"Our results suggest that Kalshi markets provide a high-frequency, continuously updated, distributionally rich benchmark that is valuable to both researchers and policymakers" pic.twitter.com/sUOVf9b0Nd
Regulatory pushback across states
The federal appellate court’s one-page decision refused Kalshi’s emergency request to pause enforcement, clearing the way for regulators to act immediately.
Nevada first issued a cease-and-desist order last year. More than 20 states have filed similar challenges since then, temporarily blocking prediction platforms from offering sports contracts, according to media reports. Regulators argue these companies operate as unlicensed casinos in violation of gambling laws.
Kalshi, however, remains defiant, seeking to move the case back to federal court under the claim that the Commodity Futures Trading Commission (CFTC) has exclusive jurisdiction over prediction markets.
Civil enforcement in Carson City
Following the ruling, NGCB filed a civil enforcement action in Carson City District Court, asserting that Kalshi is the only platform currently running unlicensed wagering in Nevada.
“Its continued operation harms the state and the public every day and poses an existential threat to the state’s gaming industry. Kalshi has continued to dramatically expand its business, rather than attempting to maintain any kind of status quo,” wrote Jessica Whalen, chief deputy solicitor general for the attorney general’s office, in the filing.
NGCB Chairman Mike Dreitzer reinforced the board’s stance. As quoted on several local media outlets, he said that it will continue to protect Nevada residents and patrons as well as upholding the integrity of the gaming industry. The Nevada Resort Association also backed the regulators, warning that Kalshi’s offerings have expanded into multi-event, multi-sport parlay wagers.
Federal oversight and political ties
The Trump administration has supported prediction platforms when it launched its full support on the same day of the Kalshi ruling. The CFTC had filed a “friend of the court” brief in Kalshi’s favour. That support has raised questions, however, about conflicts of interest, as Donald Trump Jr. has invested in rival platform Polymarket while serving as a strategic adviser to Kalshi.
Analysts caution that if Kalshi prevails, states may lose their ability to regulate sports betting effectively, reshaping the U.S. gambling landscape and threatening Nevada’s casino industry.
Additionally, the case underscores a jurisdictional clash: federal regulators argue that prediction markets are legal nationwide. They are considered financial instruments and not gambling. Therefore, it falls under its jurisdiction. In other words, it can operate across all states, even where gambling is prohibited, as reported in media outlets.
Meanwhile, Nevada, along with other states insist that prediction markets are essentially wagers, making them subject to state gambling laws. Prediction markets function like unlicenced casino, undermining regulated industries. The outcome could set a precedent for how financial innovation collides with state sovereignty in gambling regulation.
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